Decisions Facing Rachel Reeves on 8/5/15 (No 9: Refocusing Employer Support on Job Creators) #GE2015

Number 9: Refocusing DWP’s Employer Support on the United Kingdom’s Job Creators

Here are some figures for you:

Micro Enterprises (0 to 9 employees) in the UK = 1,912,455
Small Enterprises (10 to 49 employees) in the UK = 209,710
Medium Enterprises (50 to 249) in the UK = 36,505
Large Enterprises (250 employees and over) in the UK = 8,915

I suspect that it is not for nothing that Ed Miliband has been talking a lot about Small and Medium Size Enterprises (0 to 249 employees) in the last six months or so. If each of them were to create just one job that would result in 2,158,670 new jobs (in gross terms). Not only are SMEs the driver of economic growth within the UK, they are also, where the vast majority of voters in the private sector are employed.

DWP has always had a bit of a blind spot with regard to SMEs. Many good intentions about help and support that too often have foundered on the fact that assisting a new Tesco recruit its staff results in more job entries (or off flows) than pro-actively helping an SME, for example Joe and Josephine Bloggs Engineering, fill a setter/machine operator’s position. And guess which one of the two (up until now) has had more political clout?

However, big businesses with clout are not as popular as they used to be and re-focussing support on SMEs is unlikely to be unpopular. In fact, it should be good for the economy, jobseekers, the companies themselves and tax revenues. Again, such a move requires a change of culture within DWP with a greater emphasis on pro-active support for SMEs at the expense of big companies.

Yes, large businesses do create jobs (though never as many overall as they claim), but if anyone has the resources to find the right people then they have them. I fail to see why companies paying low rates of corporation tax, practising tax efficiency and seeking lower business taxes should then be allowed to pick my pocket to fill ‘new’ jobs in their businesses so they may pay a higher dividend to their shareholders. Shareholders that I bet also practise tax efficiency.

I want to see my tax pounds going to help businesses who are rooted solidly in their local communities. Who knows, we might finally see the march of the makers, might we not?

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